Ethanol (EtOH) and nicotine are perhaps the most widely co-abused drugs in the US. Along with its rewarding effects, EtOH also has profound sedative effects and these can partially be reduced by co-administration of nicotine. We have found that low, physiologically relevant EtOH concentrations profoundly inhibit nicotinic acetylcholine receptors (nAChRs) of the 17 subtype in the lateral dorsal tegmental nucleus (LDTg). Brainstem tegmental projections to limbic areas, basal ganglia and the thalamus contribute to many behaviors including reward, arousal, motor control and sensitization to drugs of abuse. EtOH is known to modulate cAMP/PKA signaling, and we hypothesize that the remarkable sensitivity of 17 nAChRs to low EtOH concentrations is mediated through effects on the PKA pathway. 17 nAChRs play a role in nicotine induced plasticity in ventral tegmental area (VTA) dopamine (DA) neurons and co-abuse of EtOH and nicotine may alter these effects. 17 nAChR inhibitors suppress locomotion and cognitive functions and our preliminary data indicates that 17 nAChRs in the LDTg mediate some of the motor impairment by acute systemic EtOH. We therefore hypothesize that motor impairment effects of low amounts of EtOH are mediated by an interaction of EtOH with 17 nAChRs, and that nicotine offsets this effect. In addition to the effects of EtOH on 17 nAChRs, our data show that EtOH potentiates non-17 nAChRs in the lateral LDTg. As large numbers of LDTg neurons send excitatory projections to the VTA, this potentiation may be a mechanism for EtOH reward. Potentiation and inhibition of non-17 nAChRs and 17 nAChRs respectively in the LDTg may also explain the co-occurrence of EtOH reward and motor impairment at relatively low concentrations of EtOH. Examining the mechanisms underlying the interactions between EtOH and the nicotinic cholinergic system may lead to more effective treatments for alcohol and nicotine addiction.